The End of Upwards-Only Rent Reviews: What the 2026 Act Means for Commercial Leases

Less than a year ago, the Government proposed a ban on upwards-only rent reviews (“UORRs”) in commercial leases. The legislation to implement that ban, the English Devolution and Community Empowerment Act 2026 (the “Act”), received Royal Assent on 29 April 2026.

Rent review mechanisms in commercial leases will fundamentally change, although the outright ban on UORRs is not expected to come into force until 2027 or 2028. This is to give the Government time to consult on the practicalities of how the new regime will operate in practice. There has been no meaningful industry debate since UORRs were first proposed.

The aim of the provision banning UORRs is to prevent rent review mechanisms from operating so that rent cannot fall. In other words, where a lease provides for a “same or upwards-only” review, the “upwards-only” element will no longer apply. Once the relevant provisions come into force, the revised rent may increase, decrease, or stay the same, and will be calculated using a formula set out in the Act.

The Act inserts new schedules into the Landlord and Tenant Act 1954 to implement the statutory ban on UORRs. These provisions apply to both protected business tenancies and contracted-out leases.

A lease containing a cap, a collar, or a traditional upwards-only rent review mechanism will be caught by the Act. However, not all rent increases will be banned: index-linked reviews, stepped rent, and open-market rent reviews without an upwards-only component will remain permitted, provided they do not include any provision that artificially prevents a downward review.

Although the ban on UORRs has not yet come into force, the Act contains specific provisions in relation to leases granted with a renewal option, agreements for lease entered into before commencement of the Act, or where a right of first refusal or pre-emption is granted.

Landlords and investors will need to rethink how to protect asset value and secure rental growth, while occupiers and tenants may benefit from greater protection against rent increases on review. Landlords will also need to be advised on alternative rent review structures when drafting new leases.

Significant change is on the horizon, and the era of upwards-only rent reviews is drawing to a close.